The Australian dollar was higher in late afternoon trade, boosted by continued capital inflows to the bond market on the interest rate differential, dealers said.
The unit traded between a high of 0.5207 usd and a low of 0.5175 during the day.
A dealer with a European bank said inflows into the bond market were continuing to push the currency higher, as the interest rate differential was proving attractive to Asian investors.
"There is quite a bit of Japanese money continuing to move into bonds because of the better rates here and that is holding up the unit," he said.
A dealer at a domestic bank said the currency will find it difficult to rally strongly despite global sentiment remaining relatively firm
"Overall, there is scope for resistance around 0.52 to be overcome with a further move to the 0.5250 area, but there will still be strong resistance around this level," he said.
"Failure to extend the rally beyond (the level) within the next week would increase the risk of a deeper correction back to 0.5120," he said.